COVINGTON - Charter Communications Inc. announced Thursday that it plans to file a prearranged Chapter 11 bankruptcy by April 1.

Service to local customers should not be affected, according to Skip James, Charter's director of government relations for Georgia and Alabama.

"We will continue to operate as usual. There will be no change in our operations," James said. "The bankruptcy is a voluntary bankruptcy. It means we should be able to keep operating as normal. This is to restructure our debt. ... Our customers should still receive our good service. There are no plans for changes to our day-to-day operations. This is strictly refinancing for the long term."

James said Charter has $800 million in operating capital. Bond holders agreed to reduce Charter's debt by $8 billion and invest $3 billion in the business for operating and debt restructuring.

"The $3 billion investment from our bond holders says a lot about our business. We're very strong. We've had nine quarters of good performance in the financial market," James said.

"Right now, we are also trying to evaluate our options," City Manager Steve Horton said. "As I understand, from what I have read, Charter intends (to) continue running its cable television systems. That is definitely a good thing. Like many other people and businesses, we currently utilize Charter for our CATV, Internet and some fiber connection needs. Secondly, we do have a franchise agreement with Charter that does earn the city some revenues and we would like to keep earning those revenues.

"More importantly, the Charter CATV/telecommunications system within Newton County and in other locations is a sizable business entity that serves a large number of citizens and it also provides jobs and incomes for a lot of people. We wish Charter well and hope that they can weather the storm, so to speak, and find a firm financial footing," he added.

Charter, which is controlled by Microsoft Corp. co-founder Paul Allen, said it has reached an agreement in principle with holders of $8 billion in debt who will give up repayment of their debt. In return, they will receive common shares, or warrants for rights to get common shares, that translate to nearly owning the entire company after bankruptcy.

Allen will remain as an investor and retain the largest voting interest in Charter. While his 51 percent stake in the company will be wiped out, along with those of other shareholders as the stock is canceled, Allen was given voting control by debt holders. Allen also holds some debt, which will be converted, and preferred stock.

In a prearranged bankruptcy, a company enters into reorganization with a plan to emerge that has the approval of major stakeholders. The rest of the creditors will be dealt with through bankruptcy court. In a prepackaged bankruptcy, each creditor has voted on the plan before the filing.

Allen, who owns the Seattle Seahawks of the National Football League and the National Basketball Association's Portland Trail Blazers, put more than $7 billion into Charter, his biggest investment after he left Microsoft in 1983. Over the years, Charter piled on debt for acquisitions. It now serves 5.5 million customers in 27 states.

The company said two of its subsidiaries will make a $74 million interest payment before the 30-day grace period for debt that was due on Jan. 15 expires. Thursday's agreement with debt holders leaves Charter with $13 billion of mostly bank debt, expiring from 2013 to 2016.

Separately, Charter said fourth-quarter revenue is expected to increase by 6.6 percent to $1.66 billion, with adjusted earnings before interest, taxes, depreciation and amortization up nearly 10 percent to $620 million.

The company expects to take a $1.5 billion impairment charge for fiscal 2008.

Charter has been skirting insolvency for years, but this time it faces a brutal combination of tight credit and billions of dollars of debt coming due. The company hasn't recorded a profit since it went public in 1999.